ACT Research: Supply and Demand Relationship Becoming More Equally Balanced
According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5–8 Report, lagging Russia’s invasion of Ukraine by about one month, some freight-related metrics looked increasingly tired in March and early April, but there’s more to the story.
ACT’s State of the Industry: NA Classes 5–8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6–7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales. Additionally, Class 5 and Classes 6–7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with this report.
According to Kenny Vieth, ACT Research’s President and Senior Analyst, “Moderating spot rates and falling load turndown data suggest that the relationship between demand and supply are becoming more equally balanced, as freight growth slows and driver capacity growth persists.” He continued, “While we acknowledge the roll-off from peak activity, some of the giveback that began in March was the return of labor on diminishing Omicron COVID case counts: Much of the 10% spot rate decline tracks rates to pre-Omicron levels.”
Vieth added, “The move to negative metrics was met with some press hysterics, but a more holistic view of the market shows still-strong and wide economic underpinnings, from corporate earnings to industrial metrics to consumer balance sheets. And, the inflation-driven slowdown that is occurring is happening in a market where pent-up demand is the rule.” He concluded, “To that end, the economy remains a secondary risk to expectations. The greater risks to the downside through the balance of 2022 and into 2023 remain ones of supply, with Ukrainian neon and Chinese zero-COVID lockdowns at the top of the list of causes that could push vehicle output below expectations.”
Regarding commercial vehicle segment production, Vieth commented, “North American commercial vehicle markets continue to perform at status quo levels: Supply-chain constraints continue to impact the industry’s ability to raise production levels toward demand. As a result, backlogs remain long, and order volumes remain constrained due to ‘within 12 months’ order reporting ground rules. Until build rates find additional traction, orders will largely mirror production levels.”
ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.
ACT’s 67th Seminar is scheduled for August 23–25, 2022. The focus will be the potential impact of decarbonization and autonomous technology on commercial vehicles and on-highway transportation. Each event ACT shares its best-in-class data and forecast in presentations, as well as featuring guest speakers to dive into topics of interest for the benefit of attendees. The agenda includes key industry leaders, who will be announced at a later date. For more information about Seminar 67 Watts Under The Hood: Transportation Transformation, click here: https://www.actresearch.net/seminar-67/.
ACT Research recently completed POWER UP, a look at 7 global regions and more than 20 countries in a review of local regulations, infrastructure, and the impact on the adoption of battery and fuel cell electric commercial vehicles through 2040. This forecast is the first of its kind, a review of the decarbonization of commercial vehicles around the world. POWER UP is available now at https://www.actresearch.net/power-up/.
Additionally, ACT Research published an update to CHARGING FORWARD, a North American-centric battery and fuel cell electric vehicle adoption rate forecast, covering 23 vehicle applications, in Classes 4–8 commercial vehicles, through 2040. CHARGING FORWARD is considered by many industry leaders to be the apex of analysis and economic-based total cost of ownership modeling in the industry. And, it is now available for purchase at https://www.actresearch.net/electric-vehicles-charge/.
Click here for more information about ACT’s State of the Industry: Classes 5–8 Report.
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